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Hedge Fund Collapse..........
09-27-2006, 10:06 AM
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#1
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Posts: 12,483
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Hedge Fund Collapse..........
read in the WSJ the other day that Aranth (spelling?) Advisors took a big bet and lost.........and have lost 65% of their value............or 6.5 billion dollars...............
Brewer, any comment
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Re: Hedge Fund Collapse..........
09-27-2006, 10:14 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Re: Hedge Fund Collapse..........
They were idiots with little/no risk controls. Plain and simple.
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Ezekiel 23:20
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Re: Hedge Fund Collapse..........
09-27-2006, 10:16 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Re: Hedge Fund Collapse..........
Quote:
Originally Posted by brewer12345
They were idiots with little/no risk controls.* Plain and simple.
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Makes sense.............what about LTCM? Those guys on paper were not idiots......
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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Re: Hedge Fund Collapse..........
09-27-2006, 10:19 AM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2003
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Re: Hedge Fund Collapse..........
Quote:
Originally Posted by FinanceDude
Makes sense.............what about LTCM?* Those guys on paper were not idiots......
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Caveat Emptor, as with all investments.
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"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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Re: Hedge Fund Collapse..........
09-27-2006, 10:20 AM
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#5
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Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,339
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Re: Hedge Fund Collapse..........
A good idea about why more common folks are headed into Hedge Funds from The Economist:
http://www.economist.com/finance/dis...ory_id=7912700
In part:
"And yet investors may be willing to gamble, despite the higher fees, because they desperately need high returns. The bear market between 2000 and 2002 brought a sober reassessment of the future returns likely from equities and bonds. With bonds yielding 4-5% and equities returning perhaps 3% on top, composite future returns of 6% or so looked inadequate. Peter Harrison, chief executive of MPC, a fund manager, says that American pension funds have analysed their liabilities. “They need more than 6% to make up the shortfalls in their funds. Whether they earn alpha or not, they have to roll the dice and try to get it."
__________________
T.S. Eliot:
Old men ought to be explorers
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Re: Hedge Fund Collapse..........
09-27-2006, 11:54 AM
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#6
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Moderator Emeritus
Join Date: Dec 2002
Location: Oahu
Posts: 26,855
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Re: Hedge Fund Collapse..........
Quote:
Originally Posted by FinanceDude
Makes sense.............what about LTCM?* Those guys on paper were not idiots......
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Bill Sharpe also says that it's a good thing the Nobel Committee can't reclaim their awards.
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Re: Hedge Fund Collapse..........
09-27-2006, 12:09 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Re: Hedge Fund Collapse..........
Quote:
Originally Posted by yakers
A good idea about why more common folks are headed into Hedge Funds from The Economist:
http://www.economist.com/finance/dis...ory_id=7912700
In part:
"And yet investors may be willing to gamble, despite the higher fees, because they desperately need high returns. The bear market between 2000 and 2002 brought a sober reassessment of the future returns likely from equities and bonds. With bonds yielding 4-5% and equities returning perhaps 3% on top, composite future returns of 6% or so looked inadequate. Peter Harrison, chief executive of MPC, a fund manager, says that American pension funds have analysed their liabilities. “They need more than 6% to make up the shortfalls in their funds. Whether they earn alpha or not, they have to roll the dice and try to get it."
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Haven't they heard of Vanguard??
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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Re: Hedge Fund Collapse..........
09-27-2006, 12:14 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,339
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Re: Hedge Fund Collapse..........
Quote:
Originally Posted by FinanceDude
Haven't they heard of Vanguard??
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I think The Economist article does somewhat explain why there is such a flow of money into hedge funds, even by some who should know better. And it is indeed a backhand endorsement of the Vanguard approach.
__________________
T.S. Eliot:
Old men ought to be explorers
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